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ENTREPRENEURSHIP DEVELOPMENT
MODULE-I
Concept of Entrepreneurship
The term ‘Entrepreneurship’ has been defined in many ways and various senses. It also defined
differently by different authors. While some call entrepreneurship as ‘risk-bearing’, others view it
‘innovating’ and yet others consider it ‘thrill-seeking’. These views are now for the convenience of
understanding broadly classified into three groups, namely, risk-bearer, organizer, and innovator.
In a Conference on Entrepreneurship held in United States, the term ‘entrepreneurship’ was defined as
follows:
“Entrepreneurship is the attempt to create value through recognition of business opportunity, the
management of risk-taking appropriate to the opportunity, and through the communicative and
management skills to mobilize human, financial and material resources necessary to bring a project to
fruition”
According to Joseph A. Schumpeter (1939), “Entrepreneurship is based on purposeful and systematic
innovation. It includes not only the independent businessman but also company directors and managers
who actually carry out innovative functions”.
1. Risk-Bearing:

He defined entrepreneur as an agent who buys factors of production at certain
prices in order to combine them into a product with a view to selling it at uncertain
prices in future. A farmer who pays out contractual incomes which are ‘certain’ to the
landlords and labourers and sells at prices that are ‘uncertain’.

Here, uncertainty is defined as a risk which cannot be insured and is
incalculable.

The entrepreneurship is for earning profits or incurring losses because of
various factors like increasing competition, changes in customer preferences, and
shortage of raw materials and so on.
Japanese proverb applies to him: “Fall seven times, stand up eight.”
2. Innovation:

Innovation that is doing something new

The ‘innovation’, i.e. introduction of new combination of factors of production,
according to Schumpeter, may occur in any one of the following five norms:
a. Introduction of a new product;
b. Introduction of a new method of production;
c. Opening of a new market;
d. Discovery of a new source of supply of raw materials; and
e. Carrying out of the new form of organization of any industry.


Something differently is a necessary condition to be called a person as an
entrepreneur.

The entrepreneur needs to apply invention after invention on a continuous basis
to meet the customers’ changing demands for products.
3. Thrill-Seeking(risk-taking):

He always takes the challenges for producing something new for the society.

He facing challenges due to uncertainty of future and selling price.
Other Important points:

Besides these above, the entrepreneur is always helps economic development
of any society, community, region and nation.

Entrepreneurship is for:
o Provide opportunity to unemployed,
o Help to generate wealth for nation,
o Help generate revenue for governance, and welfare and developmental work in
the nation, and
o Help improve quality of living.
Motivation for Economics development and Entrepreneurial Achievement:
Motivation for Entrepreneurs
1.
2.
3.
4.
5.
Economic gain
Independence
Wealth creation
Self employment
Social status
Motivation for Government
1.
2.
3.
4.
5.
Best use of resources
Fill up the demand-supply gap
Supplement regional improvement
Freedom from imports
Employment generation
Motivation for Corporate Houses
1.
2.
3.
4.
5.
6.
Achieve monopoly
Increase earning
Building goodwill
Proper use of surplus fund
Explore new opportunities
Diversification to various fields
Enterprise & Society:





Enterprises are important ingredient of the modern society
Enterprises are symbol of civilization and development in the society
Enterprises cater to the need of goods and services of the society
Enterprises bring social, educational and cultural development in the society
Benefits
1.
2.
3.
4.
5.
Enterprises are providing goods and services
Enterprises are providing both direct and indirect employment.
Enterprises brings up economic development
Enterprises are responsible for the distribution of national wealth
Enterprises create entrepreneurs.
Hazards
1.
2.
3.
4.
Enterprises causes environmental pollution
Concentration of population in small areas
It causes/reason of economic imbalance
It disturb traditional professions
Why to start business?
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Self-employment
Desire to be successful
Envious (jealous) at others’ success
To meet challenges
To earn money
To earn name and fame
To utilize talent
To utilize idle time and resources
Pain of unemployment or underemployment
To take advantage of business situations
To utilize local available resources
How to start business?
1.
2.
3.
4.
5.
6.
7.
8.
9.
Decide what business to do
Decide where to do business
When to start business?
How much to produce?
How to market?
Where to market?
How much fund to invest?
Locating sources of capital
Sourcing manpower

Entrepreneurial Traits and Skills
Traits (Personality/behavior)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
They are self confidence
They risk taker.
They take their own decision
They are highly motivated
They are good managers
They are leaders
They are innovative
They are quality conscious
They are achievement oriented
They are goal oriented
They resolve conflict
Skills (Talent/ability)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
They are good managers
They are good planners
They are capable of controlling the activities
They can self execute
They confidently delegate the work
They can forecast
They are good motivators
They are innovators
They can visualize the future prospect of their venture
They are risk-takers
They are result oriented
Mind Vs Money in commencing New Venture
Starting an enterprise is always a big challenge for any entrepreneur whether new or already existing.
But the difference lies in the fact that an entrepreneur, who is already experienced in ways of business,
takes decisions based on such experiences. In case of new entrepreneur, there is no such help.
1. Not an easy task for a first-timer
2. First-timer uses money more than mind
3. Existing entrepreneur uses mind more than money
Entrepreneurial Success and Failures
Success:
Internal Reasons